David VanHimbergen Tide Spin’s CEO on the Brand Lab Series™ Ep 52
Upstream Innovation Opportunities and Risks
Startup Brand Expectations with Procter and Gamble
On-Demand Laundry Model
Agile Technology Development
Owning Customer Experience
Marketing Without Deep Pockets
David VanHimbergen’s seventeen-year career is full of iconic Procter and Gamble brands, bookended by Tide. In addition, his most recent role was in global innovation for the brand. So who better to launch Tide Spin than David?
The startup creates a “One Wash Wow” through an on-demand laundry service. With 75 years of brand strength, they are well positioned for growth.
Brian: This week, our guest is David VanHimbergen, Tide Spin’s Founder and CEO, as well as, a brand manager at Global Tide. I’m excited to have David on because he’s the epitome of the type of guest we’ve had on in our first two seasons. We either have an executive from a big brand on, or we have an entrepreneur. And from what I know of David, he’s both.Why don’t we start by just telling our listeners a little bit about your background. It’s full of almost every household brand name that’s certainly in my house.
Yeah. So, I’ve spent my entire career at Procter & Gamble, almost 17 years. So, I started with them right out of undergrad. I went to school here at the University of Illinois, Urbana-Champaign, and then grew up originally in Louisville, Kentucky. But across my 17-year career at P&G, most of that in brand management, I’ve moved across several brands, spent a lot of time in laundry, some time working at Crest and Oral-B, and even spent two years up in Minneapolis working on our Target business.
And then in my most recent role, I was responsible for global innovation for Tide. And something we started to observe as we came into that group was, we had a lot of different opportunity areas in what we were doing. So, historically, the group that I was working in had focused on upstream innovation that was four to seven years from market. Which is needed because at times you would say, “Alright, we see a future benefit space that we wanna play in, but the solution doesn’t exist.” So, we needed to find that benefit space, give R&D kind of that construct, and then allow them time to go off and then invent the technology. And that works really well, especially for incremental innovation, of just advancing your core business.
We realized the world around us is moving a lot faster than we were, and there was an opportunity to diversify that portfolio a bit and take on some of the behaviors and cultures of the startup world. And so, you have small, lean teams working on different business models, but really studying the problems and then, figuring out like, “Okay, what could we be doing differently?”
And then, in the ideal situation, you would have the small team go in and pitch to senior management, in the same way an entrepreneur would pitch to a VC and look for funding for their idea. That’s where a team I was working with, we came up with the initial concept and idea for Tide Spin. We went in to our senior leaders and said, “Hey, just give us a little bit of money. In six months time, we wanna go run this thing in Chicago, and see what we can learn about it, and see if there’s a viable business that we wanna invest further in.”
So, you gave us a little bit about how Tide Spin came to be, but what I also think is interesting is, you’re coming from Procter & Gamble which, as we’ve already joked about, has some of the most iconic brands ever, catalyst brands that people have used for years, and years, and years. So, does that put added pressure on you from a brand expectation standpoint?
Yeah. I guess, I don’t see it as much as pressure, it’s more of an advantage for us. I think as a normal startup, when they’re getting going, one of the big things that they have to focus on is building their brand and creating an identity and making sure that’s recognizable, and then defining what they wanna stand for. For us, the beauty is, when we launched Tide Spin we had that bullseye in the logo. So immediately, it got us a foot in the door. And I think we’re careful not to be so arrogant to think that, “Oh, we have Tide on the logo, it will be a lay-up.” But it at least opens people’s minds and it builds that trust and confidence that like, “Okay, we know this is a big company that has a rich history. They’re gonna do things the right way, and gonna deliver a superior experience in the service side of things.”
So, for me, I really see it as an advantage. I think sometimes that comes along with higher expectations but honestly, I think we’ve got this history of 75 plus years working in laundry detergent, and we know that we’ve got superior products from the chemistry side, and we really know how to use that right concoction of products, set the right context and establish the best process, so you can get ultimate care for your clothes. And so, us looking at other companies that are playing in the service side of the business, we have tremendous advantage.
For our listeners who may not know, or who may not live in the Chicago area, can you just tell us how the Tide Spin model works?
Yeah. So, Tide Spin is an on-demand laundry and dry cleaning service. So, the way it works is you download our app, you create a profile, and then from there you can place an order. And within that order, you set certain instructions or preferences, like if you wanted scented Tide or unscented Tide, any details around like, “Hey, this garment requires special care,” and just the type of orders-if you’re sending in dry cleaning or if it’s just wash and fold.
And then once you’ve placed that order, our drivers come to pick it up from your house, so it’s the ultimate convenience. And we take it out to our facilities, wash it, clean it, press it, bring it back to you in your personalized Tide Spin reusable bags. And then your garments are ready to wear. So, you can just take them directly from when they’re dropped off, put them right in your drawer, hang them in your closet. So, it’s making life easier and saving you time that you can get out and do the things that you either need to do, or that you want to do.
Talk about the technology driving Tide Spin and what is the build process like, in order to make your model work?
Even if you’ve got this extremely strong business, technology is changing the game in such a way that you can create new business models, new marketplaces that are powered through this technology that can totally disrupt these strong rich industries. And so, for us, we wanted to stay on the forefront of that and just think about like, “Okay, if technology exists to automate mundane chores, laundry is a mundane chore that everyone has to take on. What does that look like for our business? And what do we need to be off learning about to protect ourselves from a future that could be different than what today is?” And so, that was the genesis of the idea.
And then, I think along the way, there’s just been delightful surprises that we’ve come across as we’ve learned, one, I think the power of a direct-to-consumer business model. Our traditional business today, we sell products through retailers that then sell to consumers, and the retailer really holds a lot of the data which… Big data, there’s a lot of power on that for analytics and really understanding behaviors and getting deeper in how do you optimize your businesses. And when you’ve got a direct-to-consumer business, you’ve got that power in your hands. And so, you can not only constantly optimize like, “Okay, what’s my right consumer target that I should be going after? What does my path to purchase look like? What does that look like after the initial trial period, how are they repeating?” When you have all that data in your hands, you can really study it and figure out, “How do I refine this business model?”
So that’s been very powerful. And then you layer on top of that, the ad tech. If I’ve got a digital app that I am marketing through social media channels, and then I can, through the SDKs and all these other things that we’ve learned in the past two years about… I can track user flow, what was the first exposure, and how do I eventually convert them. That’s a lot of power too, just within technology that allows you to optimize the end-to-end business model.
And then, I think, finally, just the experience of building a platform. I think it comes down to the team that we have in place. So, when we first came to 1871 and were recruiting the team, we were working with the recruitment team here, Laura and the folks, and we came across our CTO now, Mark Caswell. And he’s a P&G child, his mom worked for P&G and he interned for us at one point. But he, in the last two, three years, he was working for Accenture. So, he had a lot of great experience of working with big companies and managing product development, and working with development teams. So, having him on our team was very critical as we got to the build phase with one of our local dev shop partners here, HS2, which had a great portfolio of work-they have worked with Domino’s, Zipcar and others. I think we got that powerhouse of the right development team and Mark’s project management skills, and really broke down the real requirements that we needed here. I think just that process in and of itself is unique and one that we’ll be able to re-apply back in P&G. Like, if we’re building solutions, this is certainly one model, but it’s a model that could work, and this is how we could think about how we introduce new apps, new systems to power other businesses across the P&G portfolio.”
Well, that’s an interesting approach to the build which I didn’t know. If you can, and you don’t have to share any secret details, but just talk a little bit more, if you would, about that build process, like how much time did it take? It sounds like you had some good momentum behind you, but did anything come out of that, that really surprised you? Or was a little bit of a headache that maybe kept you up late at night?
I think in any development phase, there’s always headaches and bumps along the road that you don’t anticipate. But thankfully, I think, having the right team in place, we’re able to overcome those. I think as long as you expect that you’re gonna hit those bumps, when they do come, you’re like, “All right. Well, here’s the game plan then. Here’s what we need to do now instead.” I think probably, very fortunately, but we didn’t really have any major ones I think. The toughest thing for us was we really wanted to adopt that lean development cycle. We were a little agile and didn’t wanna over scope the solution for what our customer really needed. I think that’s the toughest thing as you start to fall in love like, “Okay. Well, we can add in all these features and functionality.” But if you do that without really putting it in front of the customer first, you end up over investing; you’re investing into features or things that the customer doesn’t value. And quite honestly, they might just get in the way of the experience.
So, I think probably the toughest thing is that we’ve got a lot of people, they’re brilliant and they’re like,” Hey I know this great technology, I wanna work into this product.” And it’s like, “ Are you sure that’s needed?” I think that we always try to check ourselves, like sure, we can add this in but is it going to add value to the customer experience, to the point of where it’s needed? And if not, or if it’s even in question, then let’s not put it in and let’s see if they ask for it later.
Well, that’s very wise and it’s a great segue actually because to me, I would probably argue that the most important part of any brand is actually the customer experience. I know you talked about the technology and the app that’s driving it. You talked about how it came to be, and you’re clearly solving an everyday problem that all of us have. Talk about how you ensure though good customer experience at Tide Spin?
Yeah. And that’s critical because you can drive a lot of trial early on. But especially, when we’re operating in such a limited area, sometimes acquiring those customers and expenses, you wanna make sure that you’re converting them into lifetime users. For us, there’s at least two areas that we focus on. I think one is getting the operations right, and really studying that end-to-end. We were very involved. Fortunately, we had some experience in dry cleaning already, which a lot of people may not know about, but we started a Tide Dry Cleaners business about eight years ago and it’s a franchising model. There are 55 locations across the US, most of them based on the suburbs and three here in Chicago.
We partnered with one of the franchisee partners that’s out in Naperville in Glen-Ellyn. So, they had expertise on dry cleaning. But we didn’t really know as much about the wash-and-folds, your day-to-day laundry that you’d send out, gets washed in the machine and then dried in the dryer. So, we really studied that carefully and said, “Alright, let’s get the right process in place. Make sure we’re using the right products, and refine that down to the point where it’s simple, repeatable, and we can get that Tide standard of excellence that people would expect.” And so, getting that started, and established, and written on paper so we can ensure consistency, was step one. And then step two was getting it in front of customers. We did one program initially where we offered free laundry to P&G employees that help support the Walgreen’s business here, so there were like 25, and we said, “Hey, we’ll do free laundry if you give us your stuff on Tuesday, right when we’re getting started.” And we show up at their office, and there are 75 bags of laundry.
So, we were like, “Oh, geez.” But it was good because it helped with running water through the pipes, it helped us really uncover like, “Where are the gaps? What are things we haven’t thought about before we really start doing it?” And so, that helped us to really refine and solidify the process. And it’s a very intense, manually-driven process, and there are things that are gonna happen along the way, mistakes. But what we did, we made sure that we would document those, identify when there was an issue, what happened, and then go deeper and analyze like, what was the root cause? And then establish some intervention plan for what’s gonna change now as a result of that, so we reduce the probability that it’s gonna occur again. And so, I think being maniacal about the operations was critical to just get stability there, and get things to where we needed to be, to where they were reliable, consistent, quality you’d expect from Tide.
So that’s, in general, the first one. And then the second is the customer experience side on the back end when there are issues because issues are gonna happen. There’s a lot of complexity when you’re managing delivery because you got the pickup point, you take it to your facility, it goes through their processes, then it goes back out for delivery, and things happen. We wanted to make sure that we invest in the right customer service experience on the back end, so that even when there was an issue, that’s where we really felt Tide could play a bigger role because people expect Tide to take care of them and stand behind their product and service, and so we wanted to make sure that we would transform any issue into a better experience to increase the likelihood that they would actually come back.
And so, part one of that is just, when you screw up you gotta admit it. You just gotta say, “Hey, this was our fault. It’s unacceptable. We totally understand why you’re upset.” Be understanding of what the consumer’s going through, and then take care of it and move forward with, “Here’s the best solution that we can move forward with. We wanna make sure you’re happy so that this is more likely to lead you to using us again,” versus questioning, “Is this something that I wanna be doing?” And so, over time, as you’re working through all the issues in the operations, and you’re providing a delightful experience whenever issues do arise, I think you get to that ideal state where you’re creating this lifetime loyal customer, which obviously is critical for a business to thrive long-term.
Very insightful. Well, one of the things that is clearly a buzz inside marketing these days, or branding in general, is this idea of influencer marketing. And I would argue that probably, the best influencer you could have is a really satisfied customer. So, talk a little bit about, if you can, what your retention rate has been like, and how are you measuring some of that stuff? I know you have some great opportunity with the data behind that, but are you starting to see a lot of repeat users that are really enjoying the service you provide?
Yeah. We see a ton of repeat customers. And like I said, that’s really the goal here. I think that drives the model. If you’re acquiring customers and they’re not sticking around, you’re just burning through cash and you won’t be able to survive. We’ve studied that very closely. This is again, one of the advantages of having a direct to consumer model, since we have the database of all of our customers, we can study how much have they been using us, how many people have tried us maybe once and haven’t come back, and then we send out a survey link and set up phone interviews, and we just talk to them and say, “Tell us what happened? Why did you use? Why didn’t you come back?” And often times, it’s like, “Hey, I love the service. I just, for me where I am a budget-wise, I can’t afford it regularly. It feels like more of a luxury.” And so, we’re like, “Okay, well, how else can we work through that?” Where is that right value positioning that we could convert them to a regular user? So, I think it’s like studying the customer a bit.
The other side that I think you referenced was just the referral program, and that becomes a big driver for us. It’s just, how do you create word-of-mouth? Make it very easy for customers to share their experience. The more advertising impressions that you can get that are earned, that you’re not paying for is… I mean, you guys know it, it’s extremely valuable and so, you try to create that delightful experience. I think, saving people three to four hours, and allowing them to skip wasting their Sunday doing laundry, it’s a big deal and people get excited by that, and they wanna talk about it. Just giving them a bit of a platform, or delighting them to the point where you get them to talk about it, I think is really the goal for us. And we have certain things, like for the month of April, we had a referral giveaway for Hamilton tickets. How many people could you refer, and whoever referred the most wins the Hamilton tickets. Things like that, I think, just create the right experience and then you give people somewhat of a platform to refer others, and let it spread organically, in some way.
Well, I love that it sounds like you guys are being both innovative on the tech and model side but also pretty scrappy with the marketing, because obviously when you come from the mothership of P&G or Tide and Downy, they have very deep marketing pockets, you don’t probably have that luxury. Has there been anything else, I know you mentioned some ad tech in that, but has there been anything else where you’ve found a nice little sweet spot, in terms of some of your marketing activity?
Yeah. I think the big surprise there is, like you said, we don’t have the deep pockets of the big brand. And it’s funny because people will reach out to us, either agencies or other folks that are working marketing programs, saying, “Hey, we got this great program for you, we can create a street parade for $30,000.” And it’s like, “Alright, it’s not what we’re doing here. It’s not the best idea.” And it’s the difference of, yeah, we’re the Tide brand, which is nationally known and recognized, but we’re really a local service at heart, and I think that’s what we try to communicate here in Chicago, and make sure that we insert ourselves into the community in the right ways. We have a partnership with the Ronald McDonald House in Streeterville, where we clean the clothes of any family staying there for free for the duration of their stay.
We’re obviously highly connected here in the 1871 and just grateful for the partnership that we’ve received here. But even in the activation, it’s just a lot of local grassroot stuff. It’s getting on the streets, we’ll spend nights outside of the L stops in Wicker Park, Logan Square, just handing out cards, telling people about Tide Spin and say, “Hey, here’s a trial promotional code.” We do a lot of events and buildings. We participated in the Craft Beer Fest in River North and things like that. I think just getting yourself out and visible in the community is critical because, really, at the end of the day, you are a local service.
And I think that’s just the nature of the dry-cleaning industry in general, or any laundromat. If you’ve got a dry cleaner that you prefer, that you’ve gone to for a while, you start to establish relationship there, with the person at the counter, and that becomes the identity of that service. And so, if you’re on a tech platform, where you’re removing the human element from that, how do you recreate that? So, it’s like, “Alright, this isn’t just the big Tide national brand behind this, this is someone, or it’s run and operated by people that are part of the community and care about the community thriving.” And so being visible and out there, I think is just a critical aspect of it.
Beyond the residential B2C target audience that you’re operating in, you’ve found an opportunity for the commercial, or B2B market, too which is actually really innovative. Can you talk about what you’re doing there? And then, let us know which one of those excites you more.
Yeah, I think the big thing for us, with P&G stepping into this space, is that we wanna be very careful and disciplined with how we invest and go about it. And I think, the main part of that is focus. Even when we launched here in Chicago, for the first year, we were somewhat limited in the delivery options. We said we were gonna do unattended delivery only, which means that for a customer to use the service, they had to have a secure place at their residence where they could leave their laundry. Most of our customers were living in high-rises that had doormen, so that worked very well, but we knew it was limiting the sales upside potential, but we’re like, “We’re gonna try this first, figure out in the simplest, cheapest way of how much business we could build off of this. Once we’ve validated that, we’ll move on to the next level.” I think for us, the B2C is really the biggest opportunity, because you have to have customers that care enough about their clothes, and they’ve invested in their wardrobe, so there’s a lot of value associated with that, not only just from the cost of the wardrobe that they have, but also just the stories of everyone’s garments.
Everyone has a special piece in their wardrobe that’s a favorite, or it reminds them of a time or a situation where they wore it- it has a special meaning to them. So, that’s where the Tide promise can really deliver the greatest value. We’re protecting, cleaning, and caring for your clothes in the same way that you would expect us to, because we want you to not only maintain those stories, but have the ability to create new ones. And so, for us, the consumer side is really more the focus. And then over time, as we validate and demonstrate that there’s a viable model here, then we can evolve into like, “Okay, if we wanted to play in the business space, what would that look like?”
As we begin to wind down, I’d be remiss if I didn’t ask, and you don’t have to answer, we’ve never had someone on before who has worked across so many iconic brands, and I’m curious if you’ve had a favorite throughout your career, and if so, why?
Tide has been my favorite. It was the first brand I really worked on. When I started with P&G, I actually graduated from U of I with a degree in Management Information System, so I started in the IT department. But the first brand I worked on was Tide. It just holds a special place in my heart and it’s, of course I may be biased in this, but I think it’s the flagship brand within the P&G portfolio. You can probably say Tide and Pampers are the two biggest businesses in the US. It’s the breeding ground for a lot of upper management and back then, the division was just called soap, which wasn’t very inspirational, but 20–30 years ago, you could get away with that a little bit more.
But it was just a breeding ground. And it’s just a great challenging business. Everyone has to do laundry in some way, and figure out how to accomplish the chore. We’ve been the dominant player, really, ever since 1946 when Tide launched. Immediately it took market share leadership, and really hasn’t looked back. And that’s pretty tough because we’ve had pretty aggressive competition from multi nationals, but we’ve been able to withstand that challenge and still keep a healthy category and maintain our market shares. And there’s some business fundamentals that were critical to being able to do that, but it’s just a nice story that you can tell from it, because it’s all about moms and being able to care for their families and play their role, and Tide is really empowering them or helping them in that journey to really provide for their families, so that’s my favorite. Close second is Crest but Tide’s number one for me.